NRB move to stem gold import tide

KATHMANDU: Nepal Rastra Bank (NRB) has introduced new measures in importing gold in Nepal. The decision was taken to reduce the import of gold in a poor nation like Nepal where one-third of Nepalis are subsisting on less than one US dollar per day.

NRB has introduced the provision of 40 per cent guarantee in import of the precious yellow metal.

As per the new regulation, an importer of gold must deposit 40 per cent cash for getting the letter of credit (LC) from Friday onwards. Banks can open LCs after depositing 40 per cent of the total LC amount from today, NRB said.

To discourage investment in unproductive sectors, NRB has brought the provision of controlling import of gold into Nepal. Nepalis are importing gold equal to over Rs 35 billion in a year.

Last year, the total gold import in Nepal was worth Rs 35 billion while the rate is increasing these days.

As per NRB data, gold worth around Rs 60 billion is likely to be imported this year. Nepali financial institutions imported gold worth Rs 15 billion in the first quarter of the fiscal year 2009-10.

NRB is seriously working to resolve the liquidity crunch caused by real estate, remittance and investment in other non-productive sectors this year.